WeWork Braves Out IPO Despite $900 Million Loss

Neumann, CEO of WeWork, speaks to guests during the TechCrunch Disrupt event in Manhattan, in New York City
(Photo: REUTERS/Eduardo Munoz)

WeWork, which has rebranded to the We Company when 2019 opened, has released its prospectus that it submitted to the Securities and Exchange Commission for its much anticipated initial public offering. The company plans to trade with the ticker symbol "WE."

We Company's foray to the public stage is getting heightened attention since it follows IPOs of both Uber and Lyft this year. Both ride-hailing-startups have yet to see success and continue to disappoint the market with their share prices not peaking to the intended price range. 

Critical observation will particularly be strong on We Company now with its IPO prospectus revealing that it incurred a $900 million loss just within the six months ahead of its intended public debut. The workspace rental company is expected to officially trade by September. 

We Company, originally founded in 2010, has been valued at $47 billion following investments from Japan's SoftBank amounting to $2 billion in January. Other big shareholders, as detailed in its prospectus, include WE Holdings company, Benchmark, and JP Morgan. The main underwriters for its IPO are JP Morgan Chase and Goldman Sachs.  

Despite having incurred $900 million losses, the startup had revenues of about $1.54 billion. More than half of 56 percent of that came from the United States while its international operations accounted for the rest. The startup, nevertheless, is optimistic as its members increased by more than 90 percent in 2018, coming from 527,000 members as of June 30. 

We Company is also positive since it has invested in real estate properties which it plans to lease to companies. It said it has long-term lease obligations of about $17.9 billion. 

The shared working space market, which We Company is one among the few pioneers, is expected to grow to $26 billion globally. The market is anticipated to bloat at an annual rate of 6 percent in the U.S. and 13 percent elsewhere in the world until 2022.

To date, there are more than 35,000 shared working spaces around the world. That figure translates to an overall 521 million square feet of shared space.  

A significant contribution to market expansion in the Asia Pacific. The region has an overall office stock at 2.1 percent. By comparison, the average share of office stock in Europe and North America only averages at 1.0 percent. 

Out of the Asia Pacific region, Bangalore accounted for 15 percent of Grade A office space; Shanghai accounted for 16 percent, Hong Kong 10 percent, Tokyo with 8 percent, and Singapore with 45 percent. 

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